TVX and Placer Dome plan expansion at Chilean mine

Toronto-based TVX, which already has interests in three Brazilian gold mines, bought the La Coipa project last year from Consolidated Goldfields for $30 million (US).

But the cost of a $248-million development program designed to increase La Coipa’s production to 200,000 oz gold and 16 million oz silver in 1991 from 16,000 oz gold and 1.6 million oz silver this year, persuaded TVX to bring Vancouver- based Placer Dome into the picture.

Located about 500 miles north of Santiago at an altitude of 13,000 ft, the La Coipa property contains mineable ore reserves of 72.3 million tons grading 0.035 oz gold and 2.50 oz silver per ton.

Placer Dome is now earning a 50% stake in the project where agitation leaching techniques are being used to extract gold/silver from two separate orebodies. TVX is retaining a 40% interest. The remaining 10% interest is held privately.

To earn its interest, Placer Dome has agreed to pay out $63 million in cash and assume responsibility for about $36 million in construction and other costs.

Pending results of a foreign investment contract submitted recently to the Chilean government, work will begin on a 16,500- ton-per-day plant. Scheduled to be completed in the first half of 1991, the facility will supplement an 1,100- ton-per-day plant which is now in production.

Costs of the larger facility are expected to be $248 million, plus $28 million for preproduction, interest and working capital.

During a projected life span of 13 years, La Coipa is expected to produce 2.1 million oz gold and 142.9 million oz silver at a cost of approximately $178 per oz of gold equivalent. Costs have been calculated using a silver to gold ratio of 7:2.

When work on the new facility is complete, La Coipa is expected to account for around two thirds of TVX’s South American gold production, according to a company spokesman.

TVX’s share of production from mines in Brazil and Chile should increase this year to 80,000 oz this year from 65,000 oz in 1988.

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